Annual Inflation Adjustments

Annual Inflation Adjustments

November 7, 2016

The IRS has released Revenue Procedure 2016-55 <https://www.irs.gov/pub/irs-drop/rp-16-55.pdf>, which provides annual inflation adjustments for more than 50 tax provisions, including the tax rate schedules and other tax changes. The tax items for tax year 2017 of greatest interest to most taxpayers include:

* The standard deduction for married filing jointly rises to $12,700 for tax year 2017, up $100 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $6,350 in 2017, up from $6,300 in 2016, and for heads of households, the standard deduction will be $9,350 for tax year 2017, up from $9,300 for tax year 2016.
* The personal exemption for tax year 2017 remains as it was for 2016 at $4,050.
* Estates of decedents who die during 2017 have a basic exclusion amount of $5,490,000, up from a total of $5,450,000 for estates of decedents who died in 2016.